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Equity CEFs: Don't Judge A CEF By Its Yield
- Yield is the most common factor that investors use to buy CEFs. The higher a fund's yield, the more popular the fund and typically the higher the valuation.
- Though CEFs generally offer some the highest average yields of any asset class in the financial markets, income investors can easily fall into a yield trap.
- And if interest rates eventually rise, investors should be placing even less emphasis on CEF yields and more emphasis on a fund's yield stability and NAV growth.
CEFs: An Opportunity In A Nuveen Floating Rate Fund
- When the markets become unsettled, valuations in CEFs can spike to head scratching comparisons, often for no other reason than a single institution accumulating or liquidating.
- One sector that has seen a wide variance of performances and valuations has been among the floating rate or senior loan CEFs.
- Floating-rate CEFs have generally lagged in performance compared to most fixed-income securities since they rely both on a strong economy and a rising interest rate environment.
- With talk now of interest rates possibly rising sooner than later, are there any opportunities among floating-rate funds to get involved before an upswing occurs?
Equity CEFs: New Kids On The Block
- New issue Closed-End funds (CEFs) can be expensive depending on how they come to market. CEF IPOs typically start at a premium whereas spin-offs can start at Net Asset Value.
- Two new issue CEFs have recently come to market, one in the popular energy MLP space and one in the not-so-popular small & mid cap value space.
- Though no one can be sure which sectors which will outperform going forward, just based on CEF premium and discount valuations, we can come to some investment conclusions.
Equity CEFs: The Rights Way To Play CEFs
- With the equity markets at all-time highs, its a lot harder to find opportunities in stocks and funds, and sometimes you have to consider other avenues of investing.
- Because many investors are confused about Rights offerings, this can be an area of opportunity often overlooked by investors.
- Combine Rights offerings with Closed-End funds (CEFs), and now you've got a double dose of confusion, giving even more opportunities for investors who do their homework.
Equity CEFs: Funds Benefiting From The Weakness In Technology And Small Cap Sectors
- The high flying technology and small cap sectors are having a more difficult 2014 compared to the rest of the market, with both indices down on the year.
- Should this trend continue, there are equity CEFs that emphasize value/dividend stocks but are short options in these high beta sectors to augment the income for their high yields.
- Should these CEFs long portfolio positions continue to outperform their technology and smaller cap sector counterparts, these fund's NAVs stand to outperform as well.
Equity CEFs: 1st Quarter 2014 Review - A Change In Leadership
- Lagging CEFs over the last couple years have stepped up to the forefront so far in 2014 while leaders from 2012 and 2013 have started to fade.
- Though its early to say if this trend will continue, several CEFs still offer excellent entry points as their market prices have yet to catch up to their outperforming NAVs.
- In contrast, some popular CEFs are looking more vulnerable as their NAVs begin to struggle.
Equity CEFs: A Fund Which Probably Should Just Go Open-End
- CEFs use leverage, options and other income strategies to offer much higher yields than what most mutual funds and ETFs can offer.
- CEFs which don't offer a superior yield tend to trade at wide discounts because they then compete with other yield-oriented securities.
- If a fund doesn't utilize the income advantages of a CEF structure, then fund sponsors should consider going open-end and unlocking the fund's assets.
- Equity CEFs: Sell This, Buy That From These Fund Families
- CEF Strategies: Forget 1929, Why 2014 Is More Like 2000
- Equity CEFs: Utility CEFs Are Back
- Equity CEFs: Will ETFs Beat CEFs Again In 2014?
- Equity CEFs: Which Funds To Buy And Sell Right Now - Part IV
- CEF Strategies: The Sad State Of Municipal Bond CEFs
- Equity CEFs: Which Funds To Buy And Sell Right Now - Part III
- Equity CEFs: Which Funds To Buy And Sell Right Now - Part II
- Equity CEFs: Which Funds To Buy And Sell Right Now - Part I
- Equity CEFs: THE Most Undervalued Equity CEF
- Equity CEFs: How To Play The Allianz Funds Right Now
- Equity CEFs: Terrific Opportunity In A Duff & Phelps Utility Fund
- Equity CEFs: From Birth To Liquidation - The Story Of The Allianz International & Premium Strategy Fund
- Equity CEFs: ING Funds Get Axed Again
- Equity CEFs: A Legg Mason Fund At A Double Digit Discount Outperforming The S&P 500
- Equity CEFs: Time To Step Up To The BlackRock Option-Income Funds
- Equity CEFs: The Most Undervalued And Overvalued Funds - 6 Months Later
- Will Detroit Save The Municipal Bond CEF Sector?
- Equity CEFs: A BlackRock Energy Sector Fund That Gets No Respect
- Equity CEFs: Top And Bottom Fund Performers Through July 12
- Equity CEFs: What Rotation? Bond CEFs Still Dominate Premium Valuations Over Stock CEFs
- Equity CEFs: A Safer Way To Invest In The Allianz/PIMCO Funds?
- Equity CEFs: Top Funds By Fund Family (Part II)
- CEF Strategies: Is It Time To Buy Municipal Bond CEFs?
- Equity CEFs: Top Funds By Fund Family (Part I)